The fund's primary investment objective is to provide a high level of current income and gains from net index option premiums. The fund's secondary investment objective is to seek capital appreciation consistent with the fund's strategy and its primary objective.
- Attractive quarterly distributions
- Capital appreciation, consistent with the Funds’ index option strategy
- A measure of downside protection in rapidly declining markets
- Tax-advantaged income from an index option strategy and equity dividends
The fund invests in an equity portfolio that seeks to substantially replicate price movements of a 75% / 25% combination of the S&P 500 Stock Index and the NASDAQ-100 Stock Index, respectively. The fund also sells S&P 500 and NASDAQ index call options in the same 75% / 25% ratio covering approximately 100% of the value of the fund’s equity portfolio, seeking to enhance risk-adjusted performance relative to an all equity portfolio.
|Closing Share Price (As of 12/19/2014)||$12.21
|Closing NAV per Share (As of 12/19/2014)||$13.37
|Premium / Discount**||-8.68%
|Current Distribution Rate (Market price)††||8.32%
|Distribution Amount (Quarterly)†† ||$0.2540
|Distribution Type ||Managed Distribution
The Fund is designed as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program. Investors should carefully review and consider the risks listed below before investing.
The possible loss of the entire principal amount that you invest.Shares of closed-end investment companies like the Fund frequently trade at a discount to their NAV. Your common shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.Common stock returns often have experienced significant
volatility. The value of call options sold (written) by the Fund will fluctuate. The
Fund may not participate in any appreciation of its equity portfolio as fully as it would if
the Fund did not sell call options. In addition, the Fund will continue to bear the risk of
declines in the value of the equity portfolio.Derivative securities, such as calls, puts, warrants, swaps and
forwards, carry risks different from, and possibly greater than, the risks associated with
the underlying investments.
Because index options are settled in cash, sellers of index call
options, such as the Funds, cannot provide in advance for their potential settlement obligations by acquiring and holding the underlying securities.The Fund’s investment program and the tax treatment of Fund distributions may be affected by IRS interpretations of the Internal Revenue Code and future changes in tax laws and regulations, including changes resulting from the “sunset” provisions that may apply to the favorable tax treatment of tax-advantaged dividends. There can be no assurance as to the percentage of a Fund’s distributions that will qualify as tax-advantaged dividends.
Potential distribution sources include net investment income, realized gains and/or return of capital. This Fund has adopted a Managed Distribution Policy, which is designed to provide attractive, regular distributions throughout the course of the year. Under this policy, the Fund seeks to maintain a stable regular distribution amount that, over the long term, matches the Fund’s total distributions paid to its total return. You should not draw any conclusions about a fund’s past or future investment performance from its current distribution rate. Each regular distribution will be composed of Fund earnings (net investment income) and profits (realized gains, if any), and may also include a non-taxable distribution of a portion of the Fund’s capital, which in turn consists of shareholders’ original investments plus any unrealized gains, life-to-date.
If a distribution includes anything other than net investment income, the fund provides a notice of the best estimate of its distribution sources at that time. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ 1099-DIV forms after the end of the year.